Dogecoin Price Prediction: What Next for DOGE After the Sell-Off?

Summary:

The Dogecoin price retreated in the overnight session even as Elon Musk mulled accepting DOGE by Tesla

The Dogecoin price joined the overall cryptocurrency sell-off even as Tesla mulled accepting the digital currency. DOGE declined to $0.3486, which was the lowest level since May 1. It then quickly pared back some of that losses. It has jumped by 24% from its lowest level in the overnight session. Doge is still the 5th-biggest cryptocurrency in the world with a market capitalization of more than $53 billion.

Dogecoin news: The biggest mover of DOGE today is news that Tesla has stopped accepting Bitcoins, citing the huge amount of fossil fuels used in its mining. This was a major setback for BTC and other digital currencies because of the high-profile nature of Tesla.

In another Twitter poll, Elon Musk asked his followers whether they would like Tesla to start accepting Dogecoin. More than 80% of the 3 million people who voted agreed. However, there is a possibility that the company will not accept the coin.

Do you want Tesla to accept Doge?
— Elon Musk (@elonmusk) May 11, 2021

First, Dogecoin is more volatile than Bitcoin, meaning that very few companies would like that risk. Second, it is not public whether Tesla or Elon Musk owns Bitcoin already. Third, like Bitcoin, Dogecoin uses a proof-of-work methodology. This means that its energy costs, too, are relatively higher.

Finally, Dogecoin ownership is concentrated among a small group of people. This is a major challenge since the price volatility would jump if they decided to dump their holdings.

Dogecoin price prediction

The four-hour chart shows that the Dogecoin price declined sharply in the past few days. The price is 40% below its highest point last week. Along the way, the price moved below the 25-day and 50-day exponential moving averages, which is a bearish sign. It also moved below the lower line of the ascending channel.

Further, the price seems to be forming a head and shoulders pattern, which is usually a bearish sign. This is on top of the double-top pattern that formed a few days ago. Therefore, in the near term, the DOGE price may keep retreating, with the next target being at$0.30. Still, we can’t rule out a relief rally as bulls attempt to buy the dips.